STOCK MARKET WATCH, Thursday 26 February (#1)

[ozymandius]

Thursday February 26, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 333
REICH-WING RUBBERSTAMP-Congress = DAY...
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 76 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 128 DAYS
WHERE ARE SADDAM'S WMD? - DAY 339
DAYS SINCE ENRON COLLAPSE = 824
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 53

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL ON February 25, 2004

Dow... 10,601.62 +35.25 (+0.33%)
Nasdaq... 2,022.98 +17.54 (+0.87%)
S&P 500... 1,143.67 +4.58 (+0.40%)
10-Yr Bond... 4.02% -0.01 (-0.35%)
Gold future... 396.10 -8.70 (-2.15%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[ozymandius]

1. WrapUp by Mike Hartman

Greenspan Testimony Gives Dollar a Bounce

Federal Reserve Chairman Alan Greenspan testified before the House Budget Committee that the U.S. Economy is improving, but there is reason for concern about excessive government spending as the federal budget deficit continues to grow. Mr. Greenspan said, “Overall, the economy has lately made impressive gains in output and real incomes, although progress in creating jobs has been limited.” He then went on to say, “And with short-term interest rates close to zero, monetary policy remains highly accommodative. Also, the impetus from fiscal policy appears likely to stay expansionary through this year. (What happens down the road when interest rates rise and the government can no longer afford to go deeper into debt to provide economic stimulus?) With Mr. Greenspan’s statements, the dollar popped up to 87.25 or 1.25% on the U.S. Dollar Index and settled with the cost of a euro at $1.249. Stocks and bonds showed very little volatility for the day, while commodities were mixed for the session.

<cut>
Probably the most alarming development from Mr. Greenspan’s testimony was the suggestion of reducing future benefits for Social Insecurity and Medicare to future retirees. In subsequent comments, President Bush agreed by saying benefits should remain unchanged for current retirees and soon to be retired workers, while future retired persons should expect to receive fewer benefits. When Social Security was created in 1930, there were roughly 300 workers paying into the fund for each person receiving benefits. Today the ratio is approximately 3 to 1, with a growing number of “Baby Boomers” headed for retirement. In my mind this is no surprise. The only surprise is the Fed and President openly stating there won’t be enough money in Social Security to go around for the Boomers.

Most of the people I know around my age (mid-forty’s) have already come to the conclusion we will have to fend for ourselves in retirement. I am personally not counting on one penny from the government even though I have paid much into Social Security over the years. With an election year at hand, the rhetoric surrounding retirement benefits should continue to increase in volume. One idea was to change the indexing for benefits to show the cost of living increasing at a slower rate than reality. Another possibility is raising the age when benefits can be received. Under current law the age will increase to 67 over the next twenty years, but it looks like they will push the retirement age into the seventies. Frankly, I will be very grateful if I even live that long! The cat is out of the bag for proposed resolutions to the deficiencies of our Social Security System.

Mystical Productivity

[54anickel]

31. Another great Wrap up! That HUGE drop in gasoline inventories

is quiet the eye-opener. If my math is correct, it fell 6.5 times more than expected? Looks like I will be expanding my bicycle and motorcycle usage beyond my "fair weather" riding mentality this summer.

The explanations of the No Inflation mantra and the mystical productivity are great too.

[Media_Lies_Daily]

56. Two potential reasons for the drop in gasoline inventories...

1) the increased use of gasoline by the military in Iraq and Afghanistan;

2) the stockpiling of gasoline (siphoning off into reserves) by the military for another offensive that may take place immediately following the 2004 selections.

JMHO.

[54anickel]

58. Well, that puts a happy face on it, doesn't it. I really do hope you're

wrong, but with all the headlines these days regarding Shrubs sheer inability of diplomacy I am afraid you are probably correct. ;(

[UpInArms]

2. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 87.74 Change +0.49 (+0.56%)

and an additional number today - just because ...

CLJ4 Light Sweet Crude Oil Apr (NYMEX) 35.68

related articles:

http://www.miami.com/mld/miamiherald/business/national/8040725.htm

Investors ignoring major business scandal trials, economists say

Just 18 months ago, allegations of corporate crimes at Tyco International Inc., Qwest
Communications Inc., Adelphia Communications Corp. and Imclone Systems had people screaming for justice and stock prices plummeting.

Locally, executive prosecutions have also taken place in the wake of MCA Financial Corp.'s failure in 1999 and the Kmart Corp. bankruptcy in January 2002.

But as the cases - including one starring America's most celebrated hostess Martha Stewart - work their way through highly visible trials, some economists say investors would rather look the other way and make these messes just go away.

"It's my sense the market is not paying too close of attention to these trials," said Carl Tannenbaum, chief economist with Standard Federal Bank in Chicago.

Investors like Roger Hurst of Madison Heights agree.

"I'm getting bored with them," said Hurst, a sales representative who invests in stocks. "I could care less about Martha Stewart or that Tyco guy."

So what's behind this sudden disinterest in corporate crime?

Tannenbaum speculates investors, content with their growing stock portfolios, choose to look the other way.

"We've been bought off," he said. "Investors say `Just give me my 20-percent returns. I don't want to know how you got them.'

"But my feeling is that ethics are not something that should fluctuate with the stock market. They are something that should be constant throughout time," he said.

With the Dow Jones Industrial Average closing above the 10,600 mark Wednesday, it's true many investors' stock portfolios are healthier now than they were when corporate scandals involving the likes of Stewart, Tyco and Enron Corp. surfaced in 2001 and 2002.

By July 2002, when corporate crimes were dominating the headlines, the Dow traded as low as 7702.34. It later slipped as low as 7524.06 in March 2003. Investors who had bragged about their bursting, tech-heavy stock portfolios in the late 1990s were reeling from enormous losses.

...more...

http://www.washingtonpost.com/wp-dyn/articles/A6917-2004Feb25.html

Number of Mass Layoffs Rose Sharply in January

More than 2,400 employers across the country reported laying off 50 or more workers in January, the third-highest number of so-called mass layoffs since the government became tracking them a decade ago.

Only in December 2000 and December 2002 were the number of large layoffs higher. A total of 239,454 workers lost their jobs in the January layoffs, the Bureau of Labor Statistics reported yesterday, based on unemployment insurance claims filed with state employment agencies. Among them were 17,544 temporary workers.

The total jobs lost in January was the most since November 2002, when 240,171 workers were let go in groups of 50 or more. Manufacturing workers, particularly in transportation, food processing and retail jobs, were hardest hit. The large layoffs also included 10,876 government workers, most at the state and local levels.

<snip>

The administration tried in late 2002 to cease publication of the mass layoff report, citing its cost. But Congress restored funding after state officials complained.

...more...

http://www.miami.com/mld/miamiherald/business/national/8044065.htm

Greenspan's Upbeat Mood Stirs Modest Rally, Breaks Market's Losing Streak

Feb. 26 - The stock market's five-day slide ended with a modest rally Wednesday, aided by kind words from Federal Reserve Chairman Alan Greenspan and positive earnings reports.

Addressing the House Budget Committee, Greenspan reiterated recent comments that prospects for a sustained economic expansion are good, while high productivity growth and unused economic capacity should "keep a lid on inflation."

On the corporate front, investors were encouraged by upbeat reports from the tech sector, especially Ingram Micro, Rambus and Intel.

This -- plus generally lower share prices -- was enough to attract buyers and lift the market slightly out of the doldrums. After falling almost 150 points in five losing sessions, the Dow Jones industrial average regained 35 points.

...more...

Well, I guess the dollar and the markets love the ideas that Greenspin floated - i.e. the dissolution of the FICA or Social Security Trust Fund - which, by the way, is NOT and entitlement, but a Trust Fund whereby the Federal Government deducts a portion of a worker's salary and has the employer match the worker's contribution and the money was to be SET ASIDE until the worker retired. But under Greenspin's plan, those funds will be treated as merely funds to reduce the deficit and offset the amount of the Tax Cuts that should be made permanent (in his opinion) for the top 1% of this country.

WHEEEEEEEeeeee!!!!! What a grand theft!!!!!!

I do hope that someone or something will then note that the monies were altered into the TAXES PAID column and show that the theft of such will put the lowest earning workers into the highest tax bracket ever!

But the dollar is rising on such an idea - or could it be just more intervention by Central Banks?

As you all can probably tell, I am very displeased (understatement) with this incompetent old jerk - one who would destroy the minimum wage and now just plain wants to rob those that have the fewest assets -- oh! gee! That would be the same group of people!

Have a Great Day Marketeers!

[54anickel]

3. Good Morning UIA, Ozy and all. I feel like I'm in that Groundhog Day

movie and every morning I wake up in the 80's and Voodoo economics. Too bad I'm not also 20 some years younger! I had a better sense of humor back then.
This is NOT EVEN FUNNY!
Stop the world, I think I want to get off now.

[UpInArms]

4. good morning 54anickel!

I understand your feelings about the Groundhog Day scenario -

but there seems no appropriate way to approach this mess - one that will make the world seem cheery and bright and balance all the mess into a better day :(

I posted this link in the Mass Layoffs thread last night, but think that since today is a fairly big "reports" day, it might be appropo to post it here also:

http://www.newsday.com/business/columnists/ny-bzzehren1228,0,4365885.column?coll=ny-business-columnists

excerpt:

Bad Stats

Allegations that the numbers kept by the Bureau of Labor Statistics are open to political pressure and manipulation are nothing new. (Nixon got hung up on that, among other things.) But the drumbeat of complaints has been growing louder.

Recent revisions of politically charged employment numbers have drawn attention to the problem. And while BLS statisticians defend their work, they also acknowledge they engage in a far too imperfect science for tracking developments and issuing data that carry much weight in determining everything from payments to Americans living on fixed incomes to the value of the stock market. Questions will be raised in the coming year year about the administration of the agency itself and whether funding cuts have made it more difficult for it to achieve its mandate. The numbers don't add up.

guess we'll see what kind of crap that throw at us this morning -

here's a bit of virtual breakfast for you :donut:

[54anickel]

9. Your link goes to a different, but VERY GOOD story. Here's a link to

a WA Post article on Mass Layoffs.

http://www.washingtonpost.com/wp-dyn/articles/A6917-2004Feb25.html

I would have thought they would have seen this coming what with the WARN Act for mass layoffs. While under the 60-day period, you get paid by the employer whether you actually report to work or not. You can collect UE benefits until after that 60 days. You can file your initial claim early, but that date becomes the basis for your 52 week benefit year. Most people wait to start the benefit year until they are actually out of work & pay.

it's a convoluted system.


on edit add link to that "very good" story from UIA's post on mass layoffs

http://www.newsday.com/business/columnists/ny-bzzehren1228,0,4365885.column?coll=ny-business-columnists

What Scandals Loom in 2004?
December 28, 2003


Sleazy corporate accounting, rigged stock recommendations, IPO spinning, secret compensation packages, mutual-fund market timing. As yet another calendar fourth quarter passes on Wall Street, I find myself wondering whether anyone out there needs more proof that the dreariest, most arcane subjects turn out to be the most important.

During the past three years, the financial press was slow to pick up on what turned out to be some of the biggest stories of the year, if not the decade. In retrospect, what we now recognize as major scandals should have been more obvious. Perhaps we missed them because they were so obvious.

So it goes in contemplating 2004. What are the problems we are ignoring that are staring us right in the face? The looming scandals? The shoes waiting to drop? The congressional hearings begging to be called. The "Next Enrons"? Of course, it's impossible to say, but that's why it's tempting to say, anyway.

So take a few moments and turn cynical. Stare off into space. Wallow in bad karma. Think like Eliot Spitzer. Join me in what's left of this merry holiday season. And brood.

more...

[ozymandius]

10. Good morning 54anickel, UIA and everyone. (Julie, Maeve*)

:donut: :donut: :donut: :donut: :donut: :donut:

First, I would like to say that I miss the hell out of Maeve and Julie. If you two are reading this, please try to join us again as soon as possible.

When I read the reports of Greenspan's testimony, my jaw dropped. Unfreakinbelievable! Then I read a thread last night that put Mr. Jabberwock's words into perspective: he merely completed the sentence that was started by Bush and his Congressional minions. No one wanted to say it - but we of future retirement generations are outright disenfranchised. Am I overreacting? Don't think so.

All of those letters from the Social Security Administration that I've received over the past few years were just projected lies. And furthermore, lies projected to justify the continued theft of my money to reduce debt accrued by incompetent government.

Supply siders belong in a circus side show. Never in positions of making government policy.

I, age 37, will receive nothing. My son, age 2, will receive nothing. Though I fully expect that when my son joins the workforce he will pay money into the constantly flushing governmental toilet so that people like Warren Buffett will pay less money in taxes than his secretary.

[54anickel]

14. YES! I miss Maeve and Julie too! I also share your thoughts on the

bleak future Greenspan has laid out for us all. The annual projected lies on benefits. I for one used that for figuring my additional retirement needs.

Just think of the risky investments people will be willing to get into to make up for that lose now! Perhaps that will create enough of a flood of new money into the markets to either avoid a crash or produce fresh fleece.

Either way, it's not a pretty picture.

[JNelson6563]

26. It's nice to be missed.

Hey all,

Looks like yet another day of serious spin. The picture in the attic is having it's shroud lifted and the partial glimpses being exposed are truly hideous. Seems a few are getting a little nervous, eh? Well I'd rather they have a close encounter with the sheer panic experienced by those who have been the victims of this voodoo economics. Only then could they possibly have a clue.

10:02 and here's what we're lookin' at:

Dow 10,545.63 -55.99 (-0.53%)
Nasdaq 2,014.28 -8.70 (-0.43%)
S&P 500 1,140.06 -3.61 (-0.32%)
10-Yr Bond 4.039% +0.024


I've noticed gold is down today. I hope it continues to fall some more before the rise resumes. I wouldn't mind picking up a bit more but still a little pricey for my tastes. ;-) Looks like ol' Treasuries have enjoyed a brief stint of popularity this week. A gentle slap so far today but hey, if Greenspan suggests we ship off all the medicare patients to "socialist Europe" (resulting in desired "recipient flexibility" haha), that could change in a heartbeat. If nothing else ya gotta stay optimistic. :toast:

I've certainly missed discussion with you all but have always managed to read through the great stuff posted. The good news in this is that the revolution is proceeding according to plan in northern Michigan. Overthrows and revolutions are time consuming stuff--time well spent though.

Will check back later all, hope we all make a few pennies today, somehow.

Julie

[54anickel]

28. "Time well spent" Absolutely!!! The revolution must proceed with

great vigor! Again, thanks for all you are doing toward that end.

Still miss you & Maeve though. :grouphug:

[Maeve]

30. It certainly is!

And I can't help but look in on Thursdays! :loveya:

I see the economy is not giving the job figures Dubya had promised...oh. I. am. so. surprised. And what DID happen to the PPI figures? The dog eat them? (Is that what killed the Bush's dog??)

Keeping too busy between watching GD and preparing for March (Irish storyteller's busiest month!), but I'll try to stop in now and again.
:hi:

[54anickel]

33. Great to see you again Maeve! I really need to get over to the GD

more often. I feel the need to "test" how far I can go before being locked. :evilgrin:

[UpInArms]

16. Dollar stages broad-based fightback

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1077690716076

The US dollar staged a broad-based rally against other major currencies on Thursday, although many analysts doubted the permanence of the greenback's bounce.

Indeed much of the dollar's new-found strength was a result of weakness in currencies such as the euro, where the likelihood of interest rate cuts has intensified, and the yen.

However Tony Norfield, global head of foreign exchange strategy at ABN Amro, argued that recent buyers of US assets such as equities and bonds were now rolling back some of the hedging they had put in place, strengthening the dollar. "There has been a slight shift in sentiment and people are now asking 'have we done too much hedging?'" he said.

The dollar rose to $1.2438 against the euro in mid-morning London trade, having closed at $1.2501 in New York on Wednesday. The swing was exacerbated by raised expectations of a European Central Bank rate cut, particularly in the wake of a call by Gerhard Schröder, the German chancellor, for the ECB to consider such a course of action.

BNP Paribas speculated that the dollar could rise to $1.23 if fears of a rate cut persisted, but "dollar bearishness" could return as early as next week.

...more...

[54anickel]

20. Hedge funds. I think that Greenspin hath protest too much on that

issue.

http://www.hedgeworld.com/news/read_news.cgi?section=dail&story=dail10729.html

snip>
He said that hedge funds offer tremendous value to the financial system by providing liquidity, despite their reputation for being “peculiar,” and implied that requiring them to register could reduce their effectiveness. “The value that have is to create very significant amounts of liquidity in our system,” he said.


He added, though, that he thinks hedge funds should remain as vehicles for just the wealthy, and not for those of moderate or lower incomes.

[ozymandius]

5. Exporting America

From Lou Dobbs Moneyline

http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/popups/exporting.america/content.html

Here is a list of companies we've confirmed are "Exporting America." These are U.S. companies either sending American jobs overseas, or choosing to employ cheap overseas labor, instead of American workers.

Of course, I had to check if FreeRepublic.com had a listing.

[54anickel]

6. Ozy, I was giving some more thought to Greenspin's seemingly

conflicting comments on household debt, mortgage debt and ARMs last night.

From the articles I read and posted yesterday I assume his negative comments on mortgage debt was aimed at Fannie Mae and Freddie Mac.

Aren't these instruments only available as fixed rate? Would that explain the seemingly idiotic idea of pushing for ARMs?
Of course then you have to think of what long-term effect ARMs would have on the household debt picture in an environment of rising interest rates.

Has Greenspin become senile or desperate? Either one is scary.

[UpInArms]

7. you ask

I think that query is too limited - can you add other parts?

More overt in his quest to destroy the working class of Americans?

More evil and less worried that anyone can stop the plans to turn this nation into a third world country?

:grr:

[54anickel]

11. HA! Well I was being kind in giving him the benefit of the doubt that

he's not truly Satan incarnate! :evilgrin:

[ozymandius]

22. Given the option of favoring one over the other...

I would choose fixed. Krugman switched to a fixed rate mortgage on his home almost a year ago due to his concern that the Fed would be compelled to raise rates and soon. His reasons for doing so sounded very well grounded.

Greenspan's comments on household debt sounded counter-intuitive when placed side-by-side with his concerns on ARMs. Greenspan sounds as though he expects property values to climb. This would incur additional property taxes, yes? So an ARM coupled with rising interest and property tax rates would, intuitively to me, have a reciprocal effect of draining expendable income from economic sectors that are buoyed by spare household money.

So, for me, Greenspan is senile. Desperate? Maybe. But for what?

[54anickel]

24. So have we reached Utopia? Asset values constantly rising allowing

us to finance all current expenditures through more debt? We will never have to work again to produce real goods and services? We will cash in annually by borrowing on the inflated value of our assets, with no real intention of paying the debt off, just enough to service it. Sort of like the government does now.
What a plan! Where do I sign up? :eyes:

[mbperrin]

36. If I could butt in a bit, the recommendation for ARMS is for the

protection of the mortgage industry (and their governmental guarantors), not the consumer. If the interest rates now rise rapidly in the future, ARMS will allow banks and mortgage companies to stay profitable. If they still have low interest loans out in a high interest environment (where their acquisition cost is higher than their income from those old loans), then they fail, and the taxpayers bail them out, putting even more demands on government revenues, therefore deficits and adding to the national debt, spiraling interest rates even higher, increasing the failures.

By allowing the industry to charge us plenty, they stay in business and the government has some chance to have lower deficits, et al.

Evil to consumers, but very practical in terms of covering the government's and industry's butts.

[54anickel]

45. Guess I'll have to stop giving Greenspan the benefit of the doubt

then. Is his given first name Damian?

:evilgrin:

[UpInArms]

8. economic report results from 8:30 EST

Feb 26 8:30 AM
Durable Orders Jan
actual -1.8%
projected 1.0%
anticipated 1.4%
Dec report 0.3%


Feb 26 8:30 AM
Initial Claims 02/21
actual 350K
projected 340K
anticipated 345K
last week 344K

[UpInArms]

12. US durable goods orders log surprise drop in Jan

http://www.reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=4444952

WASHINGTON, Feb 26 (Reuters) - New orders for expensive, long-lasting U.S. manufactured goods dropped unexpectedly in January as demand for aircraft and cars fell sharply, a government report showed on Thursday.

Orders for durable goods -- items meant to last three years or more - slid 1.8 percent last month after an upwardly revised gain of 1.6 percent in December, the Commerce Department said.

January's orders were much weaker than expected on Wall Street, where economists were looking for a 1.4 percent rise after a previously reported 0.3 percent December increase.

While the upward revision to December was likely to take some of the sting out of the often-volatile report, the volume of orders last month still stood below November's level.

<snip>

After two years of back-to-back declines, U.S. factories raised output marginally last year but they have yet to generate jobs. U.S. manufacturers have shed workers in each of the last 42 months, although the pace of job loss has slowed recently.

In all, 3 million factory jobs have been lost since their most recent peak in July 2000.

I don't know why in the hell these "economists" are "surprised". What do they have their heads entirely inserted up their asses?

People that are not working and earning a decent living are NOT going to be able to buy things other than absolute necessities - shelter, food, etc.

Someone definitely needs to explain to them how the cow ate the cabbage.

[54anickel]

35. I am getting a headache on following the circle of the revisions here.

slid 1.8 percent last month after an upwardly revised gain of 1.6 percent in December, the Commerce Department said.

January's orders were much weaker than expected on Wall Street, where economists were looking for a 1.4 percent rise after a previously reported 0.3 percent December increase.

Then this from the blather log
9:45AM : Indices open slightly lower on a mixed bag of reports...the economic data was disappointing, but not nearly as bad as the headlines suggested...January Durable Goods New Orders fell 1.8%, but December was revised from +0.3% to +1.6%, and excluding the volatile transportation component, total orders were up 2.0%...new claims rose slightly...Novellus (NVLS ) gave slightly improved mid-quarter guidance after the close yesterday, but the market was hoping for more...earnings reports were also mixed...the sluggish tone persists...

[ozymandius]

19. Wall Street Poised for a Soft Start

NEW YORK (Reuters) - Shares are set for a soft open on Thursday as reports on the job market and durable goods failed to alleviate investor concerns that the stock market is pricey following last year's surge.

<cut>
Separate government data showed new orders for long-lasting U.S. manufactured goods dropped unexpectedly in January as demand for aircraft and cars fell sharply. But an upward revision to December took some of the sting out of the often-volatile report.

<cut>
New home sales are due at 10:00 a.m. (1500 GMT) and are expected to rise to 1.065 million in January, from 1.060 million in December, encouraged by cheap financing.

more news

[UpInArms]

29. economic report results from 10:00 EST

Feb 26 10:00 AM
Help-Wanted Index Jan
actual 38
projected 39
anticipated 39
last month 37
revised from 38

Feb 26 10:00 AM
New Home Sales Jan
actual 1106K
projected 1170K
anticipated 1075K
last month 1025K
revised from 1060K

note: last month's revision to the New Homes Sales is beginning to look like the revisions to the UE claim numbers.

[UpInArms]

34. revised revised economic report results for 10:00 EST

oopsie! they have revised their revision!

Feb 26 10:00 AM
New Home Sales Jan
actual 1106K
projected 1170K
anticipated 1075K
last month 1125K
last month 1025K - revised to 1125K
revised from 1060K

[Frodo]

39. Interesting. Resales are down, but New homes are still strong?

Obviously neither number is "weak" (being very close to all-time highs), but they aren't moving together.

I wonder if the "sale" is measured on a different day of the process for new homes. Maybe the multi-month lag in the actual construction has something to do with it.

[punpirate]

54. New homes maybe not so strong...

... given that January housing starts were down almost eight percent. Look for new housing sales numbers to drop proportionally as those new homes are completed in February and March.

[Frodo]

57. I know they seem connected (they're both new homes), but

Housing starts is an indication of supply and new home sales is a measurement of demand. There is a relationship, but only after you wade through the inventory and weather issues.

Also "not so strong" may be pushing it. Yesm they were down from the previous couple months, but they were still stronger than at any time since the 80s. They've got to drop hundreds of thousands before the numbers themselves (rather than the change) are "weak". We spent the entire previous administration between about 1.2M and 1.7M and only the low end of that might be considered a weak number. BushI hit a low less than HALF the starts we are currently at.

And the 8% drop was largely due to weather. One region of the country was actually off something like 25%.


There's little question the real estate market is topping out (or HAS topped out). But it still appears quite strong. I just couldn't figure out what the minor disconect was between resales and new construction sales.

[Frodo]

13. Looks like gold is in trouble today.

It looked like the $400 range had established itself as a point of significant support, but gold has fallen rapidly through that and past the previous mid-November support level in the 392-393 range. Next support is around $378-$380/oz.

[54anickel]

15. Morning Frodo. Could you give your Banker assessment of my

question in post #6?

[Frodo]

17. It's confused me as well.

I'm not sure the connection you draw is correct (Fannie & Freddie DO deal in ARMs as well), but there are still some unanswered questions. And I'm not sure what the real concern with Fannie/Freddie is.

Part of the disconnect is that different types of debt have a different effect on household finances. We can't just say "they owe 25% more than they did last year".

But I still can't get a grip on recommendations to consider ARMs in what I think everyone assumes will be a rising rate environment. I think you speculated a day or two ago that maybe he was letting drop that deflation really WAS still one of those 50/50 risks.

It may also be that we don't understand what he means by ARM. There are lots of types of ARMS and SOME can be beneficial to a significant chunk of the population that never consider them. I haven't had a straight 30yr fixed for a few years (though my rate on this house IS fixed, it's "interest only" for the first decade).

[54anickel]

18. Thanks. I wasn't sure if Fannie/Freddie took on ARMs or not. Guess

that blows that theory as well.

We have one of those amortorized over 15 years with a balloon payoff due in 7. I don't know the term for that type of loan. We just pay the amount required to clear it in 7 years anyway which is something like 500 extra to principal only each month.

[mhr]

21. 239,454 American Jobs Lost In January Per The BLS

For all those that continue to claim the economy is getting better consider the latest from the Bureau of Labor Statistics.

".... the number of workers involved totaled 239,454. ... This marked the most events for a January and the third highest January level of mass-layoff initial claims since the series began. Both the number of layoff events and initial claims were higher than a year ago.January 2004 marked only the third time in the last two years that initial claims had increased over the year."

http://www.bls.gov/news.release/mmls.nr0.htm

[ozymandius]

23. 10:03 and very ugly

Dow 10,540.59 -61.03 (-0.58%)
Nasdaq 2,013.81 -9.17 (-0.45%)
S&P 500 1,138.74 -4.93 (-0.43%)
10-Yr Bond 4.039% +0.024

[54anickel]

32. Looking at the NASDAQ and S&P charts at Yahoo at 10:39. The

movements are quite similar again. Rather strange day so far for stocks and currencies.

[UpInArms]

37. 11:13 and getting quite perky

Dow 10,564.97 -36.65 (-0.35%)
Nasdaq 2,026.99 +4.01 (+0.20%)
S&P 500 1,143.11 -0.56 (-0.05%)
10-Yr Bond 4.031% +0.016

[Frodo]

38. Interesting evidence the last few days that the Nasdaq should not ..

... be on the list of major averages.

Why the tech sector by itself? Why not medical, or aerospace?

For days now it has seemed to move in it's own little world. Way up or way down without any real connection to the Dow & S&P (which obviously represent much broader swaths of the economy).

My theory is that part of the "tech bubble" of the alte 90's was that the Nasdaq was constantly reported with the S&P. People don't treat it like the other segments of the market.

[54anickel]

40. But when you look at the chart/graph it seems to making nearly

identical moves as the S&P. Almost marching in lock step again today.
:shrug:

[UpInArms]

46. the charts are definitely not traveling to the beat of different drummers

numbers at 12:26 EST

Dow 10,578.74 -22.88 (-0.22%)
Nasdaq 2,029.41 +6.43 (+0.32%)
S&P 500 1,144.13 +0.46 (+0.04%)
10-Yr Bond 4.044% +0.029

I, too, would be more than interested in Frodo's thoughts on the movement and charts today. I am quite puzzled. :shrug:

[patcox2]

25. Social Security Scaremongering, old story

You all buy into it too quickly, with this despair, that you will never see a dime. The friedman worshipping zombies want you to think that. If you think its worthless, you will not be angry when they destroy it.

As of last year, the calculation was that if SS benefist were reduced across the board by 15%, the system would remain solvent for the next 80 years.

They never mention, do they, that SS right now is producing $200 billion per year surpluses. If they did, they'd have to mention that the Bush deficit is actually $700 billion, and it only looks like $500 billion because of the $200 billion in Social Security payroll taxes that they are stealing and diverting to other purposes, instead of setting it aside to fund future claims.

The looming crisis is not that Social Security is bankrupt because it won't have any money, the crisis is that the general revenues are insufficient to pay back the social security payroll taxes that are right now being transferred into general revenue in order to pay for tax cuts for the rich.

Social security is in fine shape; its in the black for the next 35 years even with no changes. Cut it 15% and it would last forever (provided, of course, that they don't touch the current surpluses.)

The only reason the republicans are screaming "crisis" is becuase beginning in about 12 years, the government will have to stop borrwoing social security trust funds and instead start repaying them. The "crisis" is just that they will have to start paying the price of their fiscal irresponsibility.

Right now, the US is like a republican run company that is spending its employees pension fund to pay shareholder dividends, when the money is gone they are going to declare bankruptcy and tellthe workers, too bad, nothing for you. The money is there for Social Security, its just that they are spending it on other things.

[UpInArms]

27. I am not "buying" the insolvent SS issue

I am angry that the theft of the Fund is even being floated by the incompetent buffoons at the helm -

I, personally, will not be silent in the face of these pocket-picking SOBs' outrageous suggestions - and I recommend that others are not also.

http://www.kansascity.com/mld/kansascity/business/8041832.htm

(free registration required)

The Medicare and Social Security programs take in more in taxes than they spend on benefits for recipients. But Medicare is projected to go into the red in 2013 and Social Security in 2018. Surpluses currently are lent to the federal government and used to help fund the budget deficit.

When those programs go into the red, the government in theory would have to repay them. The looming shortfalls could affect financial markets and the economy long before they arrive. Looking at today's budget deficits with future Social Security and Medicare liabilities, investors may lose faith in the government's ability to avoid ever-increasing deficits. At some point, that probably would push up interest rates, threatening economic growth, Greenspan said.

[UpInArms]

41. here's a commentary on CNN

http://money.cnn.com/2004/02/26/commentary/column_hays/hays/

Geritol rage
Greenspan's advice about cutting Social Security benefits has many boiling mad.
February 26, 2004: 8:43 AM EST

Hickey claims voters will reject this line of thinking -- tax breaks for millionaires, less benefits for older people - in November: "Americans are starting to ask - why not just stop shoving cash into the pockets of millionaires? Greenspan and the Bush administration are asking average Americans to trim their Social Security checks so that Dick Cheney can keep getting his $90,000 per year in tax breaks."

[54anickel]

42. Have you ever noticed that the fear mongering and FUD surrounding

SS, Medicare and other "social" discretionary spending only seems to come up under Repug admins? Why do you suppose that is?

Compassionate conservative, my ass!

[UpInArms]

43. it seems that the repubs have declared

and did declare class warfare on the working classes many years ago.

Their disdain and open contempt of anyone without millions in assets and earnings is abominable. Their hypocrisy knows no bounds. Their asininity is unsurpassed.

[54anickel]

44. Here's a page I like to share with my Repug friends when we discuss

this maladministration. Many of the links are now broken. But I think all DUers should bookmark and read this page. I realize it is difficult, but hold your nose and peruse the page. It is best to use the GOPs own rhertoric against them.

http://www.c-span.org/campaign2000/gopplatform.asp


on edit:
Add to that, this little gem I posted yesterday regarding Fed policy since Nixon. While there are better resources out there for an historic look at Fed and monetary policy, this one wasn't bad.
Apologize for the redundancy.

http://www.atimes.com/atimes/Front_Page/FB24Aa02.html

[UpInArms]

47. some really interesting reading material

We commit ourselves to tax reforms that will sustain our nation's prosperity and reflect its decency. We will reduce the burden on all Americans, especially those who struggle most.

<snip>

That wasn't magic. It took honesty and guts from a Congress that manages the nation's purse strings. Over a five year period, as surpluses continue to grow, we will return half a trillion dollars to the taxpayers who really own it, without touching the Social Security surplus. That's what we mean by our Lock-Box: The Social Security surplus is off-limits, off budget, and will not be touched. We will not stop there, for we are also determined to protect Medicare and to pay down the national debt. Reducing that debt is both a sound policy goal and a moral imperative. Our families and most states are required to balance their budgets; it is reasonable to assume the federal government should do the same. Therefore, we reaffirm our support for a constitutional amendment to require a balanced budget.

[54anickel]

48. He-he See what I mean. This page drives my BIL nuts! Love it!!!

[54anickel]

61. Couple more SS related articles.

http://money.cnn.com/2004/02/26/news/economy/greenspan/

NEW YORK (CNN/Money) - Alan Greenspan may have touched the third rail of American politics this week by calling for cuts in Social Security benefits, but most economists weren't shocked.

Some found his proposals just about right, some thought the whole fuss was much ado about nothing.

But some conservative economists, who believe Social Security needs a drastic overhaul, thought the 77-year-old central bank chief's proposals didn't go far enough.

"He's just saying the emperor's naked," Alan Reynolds, senior fellow at the Cato Institute, a libertarian think tank, told CNNfn. "It would be nice to keep this Ponzi scheme going on at least until after the November elections, and they probably will -- but it is a long-term problem."

more...


And here's another

http://www.progressive.org/webex04/wx022604.html

Alan Greenspan Has Got to Go

Alan Greenspan's got a lot of nerve.

Instead of excoriating Bush for running up a $521 billion deficit, instead of demanding an end to the tax giveaways to the rich, which will bloat the deficit for years to come, Greenspan says slash Social Security and Medicare, and make the poor and the middle class suffer.

The class bias of the Fed chief could not be more clear.

Social programs are always the favorite whipping boy of the right.

On Medicare, Greenspan at least recognizes a real problem with costs skyrocketing, but his paymaster Bush refuses to let anybody do anything to lower costs. In fact, Bush's Medicare "reform" plan prohibits the federal government from bargaining with the drug companies to lower costs, and it prohibits people or states from importing drugs from Canada. If Greenspan were truly concerned about Medicare's costs, he would have opposed this inflationary gift to the drug companies.

more...

[UpInArms]

49. YeeHAW! UPdate at 12:39 EST

Dow 10,607.40 +5.78 (+0.05%)
Nasdaq 2,036.28 +13.30 (+0.66%)
S&P 500 1,147.10 +3.43 (+0.30%)
10-Yr Bond 4.044% +0.029

[54anickel]

50. Over lunch? Guess I go check the headlines and blather to see what's

"up" with that move, especially the DOW.

edit to add:

Guess it took the blather writers by surprise as well:

12:30PM: Mostly sideways since the last update, which is to say with mild gains for the Nasdaq, hugging the flat line for the S&P 500, and showing slight losses for the Dow, as it continues to underperform the Nasdaq and the S&P 500 on a relative basis for the second consecutive session... Note, however, that the Dow's two biggest laggards, United Technologies (UTX 89.92 -2.38) and Boeing (BA 42.28 -1.54) are shaving off roughly 28 points off the composite, as the aerospace/defense sector maintains its lagging position on the heels of the government's Comanche contract cancellation...
Excluding UTX and BA, the Dow would actually be positive... NYSE Adv/Dec 1810/1303, Nasdaq Adv/Dec 1624/1338

[UpInArms]

51. more tandem market movement at 1:24 EST

Dow 10,589.55 -12.07 (-0.11%)
Nasdaq 2,034.56 +11.58 (+0.57%)
S&P 500 1,146.03 +2.36 (+0.21%)
10-Yr Bond 4.046% +0.031

the overlay of the charts is wondrous in its symmetry

[54anickel]

52. Yes, it seems the Dow has joined the Marching band since the lunch

break step up for all. :shrug:

[aneerkoinos]

53. Silver

Silver seems to be remarkably resilient despite the dollar rally, today it ended up with a last hour rally at 6.70. There's bit of volatility too, the lowest dip during early New York was 6.30.

[54anickel]

55. A commentary that is so out of character from it's source.

Yes, I've been trying to sort through some old bookmarks again when I came across this little gem.
For those not familiar with Luskin, follow the Archives link to his Web-log of The Conspiracy to Keep You Poor and Stupid. That's what makes this article seem so out of character.

http://www.trendmacro.com/a/luskin/20010919luskin.asp

Alan Greenspan's Perfect Storm
Wednesday, September 19, 2001
Donald Luskin
Yesterday Greenspan's rate-targeting mechanism totally ruptured -- and it took the bond market down with it.
In 1971 President Richard Nixon closed the US Treasury's "gold window," formally severing the last remaining link between the American currency and gold. And ever since the dollar lost its golden moorings, it has been adrift on a stormy sea of inflation and deflation.

Now the global financial aftermath of last week's terrorist attacks are shaping up to be the perfect storm for the US dollar. And Alan Greenspan has totally lost control of the boat. On Monday he admitted as much, by stating that for the duration of the crisis he wasn't going to enforce the new interest rate level that he had just declared.

In the statement from the Federal Open Market Committee that accompanied Monday's rate cut, Greenspan said, "...the actual federal funds rate may be below its target on occasion in these unusual circumstances." And look what's happened: on the same day as he set the fed funds rate at 3%, funds traded at an average rate of 2.13% Monday, with some transactions taking place at rates near zero.

This means that interest-rate targeting has now become the latest in a series of failed experiments in how to regulate the nation's money supply in a post-gold world. Call it the Greenspan Standard -- and now we're off it. That's great, as far as I'm concerned. I've argued for years that the Fed shouldn't arbitrarily set the price of money -- interest rates -- any more than it should set the price of hamburgers or jet engines.

But now that we're off the Greenspan Standard, we're not on any standard at all....

more...


And here I thought Nixon bashing was strictly for goldbugs

[54anickel]

59. 3:35 numbers NASDAQ and S&P charts still moving in tandem, DOW

has broken back out of step a bit again.

Dow 10,600.51 -1.11 (-0.01%)
Nasdaq 2,033.63 +10.65 (+0.53%)
S&P 500 1,146.42 +2.75 (+0.24%)
30-yr Bond 4.921% +0.028

blather:
3:30PM: Action remains tame heading into the last half hour of trading...volume remains light with just 1.4 million Nasdaq shares and 1.1 million NYSE shares so far...advancers have a strong lead on decliners though, and the most notable aspect today might be the lack of any broad selling pressures after the down open...NYSE Adv/Dec 1978/1272, Nasdaq Adv/Dec 1802/1301

[54anickel]

60. Jobless claims up 6,000 to 350,000 Four-week average highest since Dec

http://cbs.marketwatch.com/news/story.asp?guid=%7BB3546FBE%2DD1D3%2D495B%2DB875%2D785D7F891DD5%7D&siteid=mktw

WASHINGTON (CBS.MW) -- The number of people applying for unemployment benefits for the first time rose 6,000 to 350,000 in the week ended Feb. 21, the Labor Department said Thursday.

The four-week average rose 2,750 to 354,750, the fourth consecutive increase in the more reliable measure of jobless claims and the highest level since December of last year. Read the full report.

Economists prefer the four-week average to the volatile weekly figure.

The number of workers who already have unemployment insurance and are seeking continuing benefits fell 4,250 to 3.1 million, according to the department's four-week average. This is the lowest number of workers collecting unemployment benefits since Jan. 31.

The insured unemployment rate remained unchanged at 2.5 percent.

more...

[54anickel]

62. Closing numbers and blather

Dow 10,580.14 -21.48 (-0.20%)
Nasdaq 2,032.57 +9.59 (+0.47%)
S&P 500 1,144.91 +1.24 (+0.11%)
30-yr Bond 4.921% +0.028

Close: It was a fairly quiet day, but a good one...after a lower open, the broader market showed a bias to the up side all day...the Dow was lower, but that was due primarily to Boeing (BA 42.44 -1.38) and United Technologies (UTX 89.88 -2.42)...both had been hit earlier this week after the Pentagon cancelled a helicopter program, then today transportation orders were reported down 10%...that was the reason for the overall 1.8% drop in January Durable Goods New Orders...excluding transportation, orders were up 2.0%, and there was strength across the board...

the New Claims and Home Sales data were mixed but uninspiring...after the initial disappointment from the economic data, the indices drifted higher...technology stocks led the way, but the gains were broad...advancers led decliners by about 3-to-2, which is impressive for a modest up day...few sectors were down other than transportation...later in the day, the Justice Department said it would block Oracle's (ORCL 13.28 +0.09) bid for PeopleSoft (PSFT 21.78 -0.35), which boosted ORCL but had no broad impact...Genentech (DNA 103.10 +7.02) got a boost when the FDA approved its cancer drug Avastin...

volume was very light, so the lack of selling pressure after the recent weakness in the indices is the story of the day...broad, modest gains on a quiet day is helpful at this time...

[KoKo]

63. Kick.

:kick: